October 1, 2009

The Times They Are A-Changin': 2010 Brings Improvements to Programs for Low Income Medicare Beneficiaries

It is not too soon for advocates to start paying attention to changes in Medicare and Medicaid law that will affect their low income Medicare beneficiary clients starting January 1, 2010.   The changes were included in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), Pub. Law 110-275, which was enacted over Presidential veto in July 2008.

The changes affect the Part D Low Income Subsidy (LIS), the Medicare Savings Programs (MSPs) that excuse certain beneficiaries from some or all of Medicare's premiums and cost-sharing, and Specialized Medicare Advantage plans for Special Needs Individuals (SNPs).  This Alert will describe the various provisions of the law and steps currently being taken to implement them.  Unless stated otherwise, all provisions discussed here are effective January 1, 2010.

Provisions Relating to the Low Income Subsidy

Exemptions from Income and Resources in Determining Eligibility for Low Income Subsidy.  This provision streamlines income and eligibility determinations for LIS by eliminating consideration, as income, of non-financial support provided to an applicant (generally referred to as "in-kind support and maintenance" or "ISM") and consideration, as a resource, of the cash surrender value of a life insurance policy.  The provision is effective for applications filed on or after January 1, 2010.  The provision does not apply to Medicare Savings Programs but under pre-existing law, states have the flexibility to eliminate these and other elements of the eligibility determination process.

Because the provision is not effective until 2010, the Social Security Administration (SSA) will process all applications in 2009 using the existing eligibility rules and will not release application forms that reflect the new rules until mid-to-late December (or January 1, 2010 for the on-line application).  All individuals who have ever been found ineligible for the low income subsidy will be contacted early in the 2010 with information about the new rules and an invitation to reapply.  SSA suggests that advocates screen their clients carefully to determine whether they should apply for LIS in 2009 or wait until 2010.  Because the new application forms are not yet available, it is not possible at this time to complete an application and hold it until January 1, 2010. 

Protection from Paying the Part D Late Enrollment Penalty.  This provision of the law codifies current CMS policy of excusing those who receive the low income subsidy from paying any late enrollment penalty.

Eliminating Barriers to Enrollment.  This section of MIPPA comprises several elements intended to improve enrollment in both the Part D Low Income Subsidy (LIS) program, administered by the Social Security Administration, and the Medicare Savings Programs, administered by the States. The portion relating to MSPs will be discussed below.  The LIS portions, discussed here, became effective October 1, 2008.

With respect to LIS, the Commissioner of Social Security is directed, for each person who applies for LIS, requests an LIS application or is otherwise identified as potentially LIS eligible, to provide information on both LIS and MSP, provide an LIS application, provide information about where the individual can get assistance, including information about State Health Insurance Counseling and Assistance Programs (SHIPs), and make such information and the application available at local Social Security offices.

In addition, the Commissioner must provide training about both LIS and MSP to those SSA employees who will receive LIS applications and must instruct them to help applicants complete the applications.

Provisions Relating to Medicare Savings Programs
 

Application of the Full Low Income Subsidy Asset Test to Three Medicare Savings Programs.[1]  The three Medicare Savings Programs (MSPs) that confer deemed LIS-status - Qualified Medicare Beneficiary (QMB), Specified Low Income Medicare Beneficiary (SLMB) and Qualified Individual (QI) - will use the Low Income Subsidy asset test of $6,000/individual and $9,000/couple, indexed each year according to the Consumer Price Index.  (The indexed amount for 2009 is $6,600/individual and $9,910/couple; the amounts for 2010 have not yet been announced.) This provision increases the federal level asset test for these MSPs and indexes the amount, both for the first time in the programs' histories.  MIPPA makes no change in states' ability to eliminate or further increase the asset level for MSPs; the provision merely sets the floor.

Eliminating Application of Estate Recovery.  This provision amends Medicaid law to prohibit states from recovering, from the estate of a deceased Medicaid recipient, the value of Medicare premiums and cost-sharing paid under all Medicare Savings Programs.  Advocates have reported for years that the threat of estate recovery is a barrier to applying for MSP for some individuals. As advocates may be aware, states are not currently required to recover MSP costs from estates but they are permitted to do so.  Many states do not.  Advocates may want to review the application form used for MSP to ensure that references to estate recovery have been removed.  In states that use the full Medicaid application for MSP, advocates may want to negotiate with the state to amend the application to clarify the limits of estate recovery.

Translation of the Model MSP Form.  This provision requires the Secretary to provide for translation of the model MSP application form, available on the CMS website, into at least the 10 languages spoken most often by applicants for Medicare.  States are permitted, but not required, to use the model application for Medicare Savings Programs; it is intended as a simpler alternative to a full Medicaid application.  Advocates are reminded that states that use this or their own simpler alternative to a full Medicaid application are, nonetheless, still required to consider an applicant for all Medicaid programs for which she or he might be eligible.[2] A link to the application is available at http://www.cms.gov/DualEligible/03_ModelApplicationforMedicareSavingsPrograms.asp  but currently the application appears only in English

Eliminating Barriers to Enrollment through Data Sharing.  The Commissioner of Social Security must, with the consent of an LIS applicant, transmit data received and processed from the application to the applicant's state for its consideration of the applicant's eligibility for a Medicare Savings Program.  The State must act on the data and must consider the date of the application for LIS as the effective date of the MSP application for benefit purposes.  As required by pre-existing Medicaid law, the state must process the application within 45 days of receipt of the LIS data from SSA. 

Advocates are urged to contact their states to discuss how the state intends to proceed when it receives the SSA-transmitted data.  Some states will send a formal application to the individual in the mail and close the case if the person has not responded within a certain time frame.  Because the LIS data have been verified by SSA prior to their transmission and because, for Medicaid purposes, CMS treats them as verified, a state could, if its MSP eligibility rules were identical to or more liberal than those for LIS, accept the LIS data as a complete application.  CMS has advised the states orally that they do not need a "wet" signature (i.e., an application signed in person) for a valid MSP application.[3]  At least three states, Alabama, New York and Maine, plan to treat the LIS data as a complete or near complete MSP application.

CMS will advise the states in writing about MIPPA matters through a Dear State Medicaid Director letter, which has not yet been sent and is not currently available for public viewing.  Among other issues addressed in the letter is the states' ongoing ability, through a provision of the Medicaid law, to change their eligibility rules to conform to (or be more liberal than) those of LIS. Such changes could be advantageous to low-income beneficiaries in most states as they would expand MSP eligibility.  Moreover, such changes could ease the administrative cost and challenge of the state's responsibility to act on the SSA-transmitted data.  In the past, the biggest discrepancy between MSP and LIS has been the level of protected assets; since those levels are required, by MIPPA,  to be aligned, most states would have relatively minor adjustments to make.[4]

CMS has no plans to monitor states' implementation of the MIPPA changes.  Advocacy organizations that received money authorized in MIPPA to help low-income beneficiaries are pressing the agency to work with them to ensure as smooth a transition as possible to the new systems and rules.

Provisions Relating to Medicare Advantage Special Needs Plans for Special Needs Individuals

Continued Authority for Special Needs Plans for Specialized Needs Individuals and Specific Requirements.[5]  Authority for the existence of Special Needs Plans (SNPs) is extended through the end of 2010 and the moratorium on the Secretary's authority to designate new plans, currently in effect, is extended through 2010.

Each type of SNP – Institutional, Dual Eligible and Disabling Chronic Condition – must, effective January 1, 2010, enroll only individuals who meet the statutory definition of special needs individual for its SNP type. 

• Institutional SNPs seeking to enroll individuals living in the community but requiring an institutional level of care must use a state assessment tool to determine the need for institutional level of care and must have the assessment performed by an entity other than the organization offering the plan.

• Dual SNPs must provide each prospective enrollee, prior to enrollment, with a comprehensive written statement of benefits and cost-sharing protections under the relevant State Medicaid plan and an explanation of which such benefits and cost-sharing protections are available under the plan. This provision, presumably, would allow a prospective dual enrollee to determine if she will receive any value from a dual SNP that is not already available to her under her State Medicaid program.  One challenge for those helping individuals make choices is to determine whether the plan has accurately presented State Medicaid coverage, which is not an easy undertaking.

• Dual SNPs must also have a contract with the State Medicaid agency to provide, or arrange for the provision of, benefits to which the individual is entitled under Medicaid.  Such benefits may, but apparently are not required to, include long-term care services.  Those plans that do not have such a contract in effect by January 1, 2010 may continue to operate but cannot expand their service areas.  States are not required to enter into contracts with SNPs.[6]
   

• Severe or Disabling Chronic Condition SNPs.  The definition for persons eligible for the services of such SNPs is amended to include having "one or more [co-morbid] and medically complex chronic conditions that are substantially disabling or life threatening, have a high risk of hospitalization or other significant adverse health outcomes, and require specialized delivery systems across domains of care" The Secretary of HHS is directed to convene a panel including the Director of the Agency for Healthcare Research and Quality to determine conditions that meet this new definition.

• All SNPs, regardless of type, must meet new requirements for care management.  They must have in place an evidence-based model of care with appropriate networks of providers and specialists; conduct an initial assessment and annual reassessment of each individual's physical, psychosocial and functional needs; develop a care plan, in consultation with the individual, as feasible, that identifies goals and objectives and specific services and benefits to be provided; and uses an interdisciplinary team in the management of care.  The Secretary of HHS is directed to review each plan's care management compliance as part of a periodic audit.

• All SNPs, regardless of type, must meet new data collection and reporting requirements relating to their compliance with the new plan requirements introduced by this law.  Such data "may be based on claims data" and must be reported at the plan, rather than sponsor, level.

Nothing in the MIPPA provisions affects benefits to which dual eligible individuals are entitled through their State Medicaid programs.

Limitation on Out-of-Pocket Costs for Dual Eligibles and Qualified Medicare Beneficiaries Enrolled in Medicare Advantage Special Needs Plans.  MIPPA prohibits Dual Eligible SNPs (Dual-SNP) from imposing cost-sharing requirements on dual eligibles or Qualified Medicare Beneficiaries that would exceed the amounts permitted under the State Medicaid plan if the individual were not enrolled in the Dual-SNP.  This prohibition is, however, redundant of and actually narrower than protections in pre-existing Medicare and Medicaid law.[7]  Existing protections, moreover, apply not just to enrollees of Dual-SNPs, but to all dual eligibles, whether in traditional Medicare or any kind of Medicare Advantage plan (regardless of whether it is a SNP).[8] CMS acknowledges the broader reach of current law in its Medicare Advantage regulations concerning MA plans' contracts with their provider networks.[9]

Conclusion

The MIPPA provisions are advantageous to low-income Medicare beneficiaries but the transition from 2009 eligibility rules to 2010 eligibility rules will be challenging for advocates advising beneficiaries during the last few months of 2009.  Moreover, advocates will want to be engaged with and monitoring their state's implementation of significant new requirements relating to MSPs – new asset limits, elimination of estate recovery for MSPs and receipt of and action on SSA LIS data by the state Medicaid agency. Finally, advocates may want to determine how many SNPs operating in their state have contracts with the state Medicaid agency and what the nature of those contracts is.  The Center for Medicare Advocacy is interested in knowing what is happening in states related to these issues.

For questions or comments concerning implementation of MIPPA's low income provisions, please contact Patricia Nemore, Esq. (pnemore @ medicareadvocacy.org) or Vicki Gottlich, Esq., (vgottlich @ medicareadvocacy.org), in the Center for Medicare Advocacy's Washington, DC office at (202) 293-5760.

Copyright © 2010 Center for Medicare Advocacy, Inc.